• Bookkeepers and Auditing - Can bookkeepers audit??
• The First BAS of the Year - Really, really important 
• Use of the ICB Crest - Who can use the crest on their stationery
• ATO BAS Agent Induction Pack – A MUST for all BAS Agents
• We need your help – We are redeveloping our Resources page
• Upcoming ICB Network Meetings – CAN you afford to miss these??
• NEW – Question of the Month – What do you think?
• Essential Payroll Education - What you need to know
• Still need your Certificate IV?? – Update from Swinburne University

The PDF version of this newsletter is available here

In order to be beyond doubt your entire document flow, correspondence and behaviour must be indicative of being engaged under contract to produce results (not the esoteric management kpi theory results but results as in the practical output that will result from your work): Your engagement letter should describe the result (eg processing for the month &/or bank reconciliations &/or accurate P&L and Balance Sheet reports) that you are being engaged to deliver and your invoices should indicate specifically the results delivered. You may still charge an hourly rate for the result however this should be a by product of generating the result.

If you work; the same number of hours per week at the same times and same days; your invoices simply state hours by $rate; your work is reviewed controlled and instructed by the client; then it is going to be harder to justify that you are not an employee for at least Super Guarantee purposes.

Warning:

The ATO “Employee/Contractor Decision Tool” – are you really an employee or contractor? can yield an incorrect result for individual bookkeeper businesses who are contracted to provide a result but are paid on an hourly basis.

The ATO Superannuation Guarantee eligibility tool found on the ATO website relies on the above decision which maybe incorrect.

It is the ICB view of the superannuation requirements that:

1. an individual can be a Bookkeeper/BAS Agent in business
2. you should be contracted to produce a result for the client. ie your agreement details exactly what tasks you will achieve
3. the agreement may or maynot stipulate a fixed fee for the task and it may or maynot stipulate the agreed hourly rate you will be paid
4. you are a contactor

If your agreement with the client further stipulates that:

1. you are responsible for errors in the work
2. you are able to have the work product performed by others on your behalf then this will assist your position. 

• eg “a” gross wage of $50,000 results in super guarantee of $4,500 therefore total package of $54,500

When the employee chooses to sacrifice part of their gross wage into super (or anything else for that matter) the gross wage then is reduced and the 9% super guarantee amount applies to the reduced gross wage.

• eg “b” if the employee is salary sacrificing $1500 into a Laptop then gross wage would become $48,500 with a compulsory superguarantee amount of $4,365. Total package now is $54,365 ie looks like a loss of $135 to the employee

This may not seem fair so when negotiating the total package ($54,500) the employee should always start from the point of view that their package total is Gross wage + 9% super and any alteration should equal the total of the same amount of cost to the employer

• eg “c” the employee should request the same amount of super be paid ie the $4500 resulting in the same total package, alternatively “d” the $135 loss could be added back into the gross wage $123.85/ super 9% of 123.85 = $11.15 or total alteration add back of $135

Technically the employer is only required to pay 9% of the reduced gross wage

What if the employee is salary sacrificing into superannuation?

The employers contribution to the superfund for an employee, under super guarantee, must only be an amount of 9% of the gross wage. So you have a reduced gross wage and you already have super being paid

• eg “e” employee sacrifices $1500 into their super fund. Gross wage reduces to $48,500 and compulsory super amount of $4,365. However as the employer is paying the $1500 sacrificed as an employer contribution into super then technically they only have the balance an additional $2,865 to pay. The employer has not only paid $48,500 as gross wage and $4,500 as salary hence total package of $53,000 – a saving to the employer of $1500.

As this wasn’t the intention but it was the intention of the employee to have the original 9% contributed $4,500 and then an additional $1,500 sacrificed and contributed, the arrangement should have been to have this total of $6,000 “f” paid into super and the total package amount remains the same.

Payment summary – what goes onto Reportable Employer Superannuation Contribution?

Note the super guarantee amount of 9% of gross wage (in the vast majority of cases). 

• Example “a” above was easy: only 9% super was paid hence $nil reportable super.
• Example “b” the resulting 9% super of $4,365 is NOT reportable hence $nil.
• Example “c” $4,500 was paid however the 9% of gross wage is only $4,365 therefore $135 is reportable
• Example “d” the salary gross wage has been adjusted and therefore 9% is the total super paid and hence nothing reportable
• Example “e” the total amount paid was 9% of gross wage hence $nil reportable
• Example “f” the 9% of gross was $4,365 but a total of $6,000 was paid hence reportable super is $1,635

It is this latter example that is the clearest example of what Reportable super is meant to catch: ie sacrificed remuneration that otherwise wouldn’t be reported.

Question of the month

What is the reportable superannuation amount when the employee salary sacrifices 100% of their salary in to super?

Prize awarded to the best argued most correct answer.

1. The PAYG Instalment method you chose is unchangeable for the year. The Options are:
   1. Instalment Rate method: Each quarter work out the value of T1 (Taxable Income as defined for the BAS) and multiply it by the ATO determined PAYG instalment rate.
   2. Instalment Amount: The ATO will look at the last lodged tax return and the tax amount payable, increase that amount by GDP and then divided by 4 requiring your client to pay that instalment amount each quarter.
   3. Annual Instalment: GDP Adjusted

Therefore, the bookkeepers role, is to review the notional rate provided by ATO on the 1st quarter BAS of the year and check if the business profitability has changed enough to discuss the rate with the client and Accountant. Remember, choosing the Instalment Amount determined by the ATO will lock the client in for the remainder of the year with this value, regardless of the how the business is performing.

1. PAYG Withholding: should your client be paying monthly or quarterly? The threshhold for paying quarterly is the annual PAYG Withholding amount must be less than $25,000. It is an advantage for your client to be on quarterly in terms of timing of the BAS’s as registered BAS. Agents receive a 4 week extension for each BAS that is lodged electronically where all facets of the BAS are quarterly ie no monthly PAYG Withholding

ICB Resources is “UNDER RE-CONSTRUCTION”

• Building/Construction Industry
• Retail Industry
• Pharmacy Industry
• Newsagents Industry 
• Real Estate
• Wine Industry
• Medical Industry
• Agriculture Industry
• Hospitality Industry
• Manufacturing Industry
• Service Industry

1. To lodge your form using the portal, follow the steps below. Save a copy of the completed form to your computer.
2. Log onto the portal and select ‘Mail’ and ‘New message’.
3. Select ‘Lodgement deferral request’.
4. Select ‘My business or practice’ to create your portal message.
5. Select ‘Add’ under attachments to attach your form, check and then send

Remember to include detailed information supporting your request.

Refer to ATO Website: http://ato.gov.au/taxprofessionals/content.asp?doc=/content/00246404.htm&page=8&H8

Annual PAYG instalments are due soon

ATO have sent clients’ annual pay as you go (PAYG) instalment notices in July 2010. The due date for payment of these instalments is 21 October 2010.

Clients must still pay their annual instalment by this due date, even if they or their tax agent have already lodged their income tax return.

ATO NOTE: It is best to pay the annual PAYG instalment amount before you lodge the income tax return. If you wish to vary your PAYG instalment amount, including to zero, do so before the due date and lodge your income tax return for the year.

ATO have extended tax payment obligations for small businesses

For small businesses with a turnover under $2million, have an extension for the following arrangements. The ATO has extended the due date to 30th June 2011.

12 month general interest charge (GIC) free payment arrangements, and deferred activity statement payment due dates.

Note the GIC free payment arrangements must be paid by direct debit.

Refer to ATO Website: Measures to help small business meet their tax obligations. 

Register your company now, using the Standard Application (now option B on the http://tpb.gov.au website) which nominates you as the supervising registered BAS Agent.

When the company registration comes through then you may provide those services by the company in its own right.

Can I use the TPB logo on my stationery to indicate I am a BAS Agent?

We don’t know, there has been no prohibition nor permission: We will seek guidance from the Board.

• contains useful links to sections of our website at www.ato.gov.au
• provides an overview of the registered tax agent and BAS agent (registered agent)
• role within the tax system
• includes procedural and administrative information that applies when acting on behalf of clients.

How to use this package

This package is closely aligned with the Tax Professionals segment of our website, which will help anyone new to a practice familiarise themselves with site navigation and content. 

BAS AGENT ATO phone number

13 72 86

BAS AGENTS proving themselves to the ATO

http://ato.gov.au/taxprofessionals/content.asp?doc=/content/29115.htm

This web page describes the process that every phone call you make to the ato should take to correctly identify yourself and your right to talk to the ato about a particular client

NOTE: That it will always be easier for the ATO to talk to you if the client is listed on your view of the BAS Agent Portal

• IF you lodge their BAS using your BAS Portal or ECI
• IF you have added that client to your view of the portal before 30 September

• Are you providing a BAS Service?

• Are you currently operating under the BAS registration transitional arrangements?

• Still need to get your Certificate IV in Financial Services – Bookkeeping?

If you answered yes to the above questions, then Swinburne has the answer for you We offer Certificate IV in Financial Services-Bookkeeping in various modes too suit your lifestyle. 

• Fast track workshop delivery model
• Online
• Recognition of Prior Learning. (RPL)
  (Take advantage of our special RPL deals for 2010 only. RPL the full qualification for only $120.00 – if gap training is required additional enrolment fees will apply)

Enquire now at ptattersall@swin.edu.au or call 03 9210 1193 

• Set a sales limit for each customer and stick to it. This way you will limit the risk of non payment to the total limit you have set for each customer. If you have sales staff, make sure they are aware of the limits.
• Agree payment terms before the order. Some customers will have standard payment terms; however, it is important to negotiate the payment terms before you start to transact with the customer.
• Invoice early: send the invoice with the goods or service once the order is completed (and delivered). Don’t wait until the end of the week or month as this will add to the days outstanding for payment.
• Where commission is paid to sales staff, pay commission on amounts collected, rather than on total sales amount booked.
• Run regular reports to identify when payments are due – e.g. an aged debtors report. This will identify slow paying customers and allow you to make contact early to discuss any issues – faulty goods, inadequate service, inability to pay, etc.
• Make arrangements for non-paying customers: offer a payment plan to clear the debt – it is much better to get paid in instalments than not to get paid at all.

Don’t be hesitant to sack a customer. Remember a good customer is only one that pays. If you are not collecting the cash from your customer, then your business is funding your customer’s business as well as your own.

This article is by Jan Barned is reprinted with permission from Financial Management Trainer (fmtrainer.com.au) 

1. Fair Work Act
2. Superannuation
3. Terminations
4. Expats
5. Excel Masterclass
6. Compliance Case Study

Conference sessions are an excellent way to learn from the experience and knowledge of our speakers, but networking and interactive sessions also complement formal learning. Go to www.payroll.com.au and book now!

ICB members – pay the member rate.

That would be a $400 discount on the 2 day conference rate for non-members and a $100 discount for 1 day

Put your ICB membership number on the application form that you can download from the Workplace Review website (e.g. ICB xxxxxx)

Attend just one course – or both!

You can choose to attend and complete just one course – or both. But you’ll only receive the special ICB QuickBooks Proficient Bookkeeper Certificate of Achievement upon completion of both courses. And for just $398 – there’s never been a better reason to invest in training for your business!

Click here to register and secure your seat today!

1. This crest is the property of The Institute of Certified Bookkeepers under copyright law.
2. Improper or unauthorised use of the ICB crest is strictly forbidden.

If you need any further details regarding the ICB Crest please do not hesitate in contacting us.

When this occurs, you will receive the following message:

‘Portal under maintenance’ – appears when attempting to login to the portal when maintenance is being undertaken and the portal is unavailable.

Very important update from the ATO – “BAS Agents ARE NOT allowed to work Saturday nights!!. 

• Accessing the BAS Agent Portal
• Requests for additional time to lodge
• Annual PAYG instalments are due soon
• Varying GST instalments correctly
• Measures to assist small businesses extended
• BAS agent seminar program is underway
• Data matching detects online businesses running ‘off the books’
• Targeting tax crime e-magazine – issue 3 out now
• BAS agents – home
• What’s new? 

• Apply for ICB Membership here
• Renew your ICB Membership here
• BAS Agent updates and information